What utter cack
1. Yes, Google puts everything into the URL. This makes it trivially easy to code up your own search links (trust me, if it used POST data, this is somewhat harder, if not damn near impossible to do as a simple link).
2. It isn't just Google. Try http://www.bing.com/search?q=budgies&go=&form=QBLH&filt=all&qs=n&sk= [ditto Altavista and Lycos]
3. None of this is relevant. Passing parameters in the URL is a specified part of how HTTP works. There's the ?blah=meh form and there's the POST form. It's in the RFCs...
4. Google's string is http://www.google.com/search?hl=en&source=hp&biw=1024&bih=440&q=budgies&aq=f&aqi=g10&aql=&oq=&gs_rfai= and, asides from a bunch of empty parameters, the only privacy-busting thing is it has sniffed my screen size. Only 440? That's 160 short, must be the browser window visible area. Well, if it helps them sort out the icky YouTube layout, then fine... I'll give you some extra info. It's an eeePC 901. And here's a freebie for you. My browser's UserAgent is custom. ;-)
5. It is your browser generating the referrer text. You can turn this off (and if you can't, change browser!).
6. I do referrer sniffing on my blog to see what weird and wonderful search terms bring people to my site. Not so much of the wonderful, but there's "weird" by the bucketload. Loads of people are looking for VistaFont_JPN [it's the 4th/5th result, why are people coming to me!?]. Recent favourites - "bakable plastic cookies" and "cute jap chick with fukin enormus big tits" [sic!]. Cute Japanese girls do feature on my blog, but they're all dressed. Call me weird, but I'm less impressed by (half-)naked girls, there's no mystique when it's all on show. As for bakable plastic cookies, WTF? Is this a business opportunity I don't know about? Or are people finally being honest about those ready-made dough lumps you put in the over for ten minutes that are supposed to turn into delicious cookies but usually end up looking like baked cat sick...